Rules put medical pot shops under added scrutiny

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This photo taken Friday, March 28, 2014 shows Cherry City Compassion, a medical marijuana store in Salem, Ore. Until now, medical pot shops have operated in a gray area. That's changed under a law passed last year that legalizes medical marijuana dispensaries so long as they apply for and are granted a license. (AP Photo/Chad Garland)

SALEM, Ore. (AP) - A line of patients forms in the lobby of a medical marijuana shop called Cherry City Compassion as a worker checks IDs, enters names into a computer system and performs other duties required under a new state law.

The extra scrutiny is new to these holders of Oregon medical marijuana cards waiting to enter a room with medicines priced at $140 to $290 an ounce, depending on the strain, grower and other factors.

Until now, medical pot shops have operated in a gray area. That's changed under a law passed last year that legalizes medical marijuana dispensaries as long as they apply for and are granted a license.

Cherry City was among the first dispensaries approved when the state began sending out licenses March 21. So far, the state has cleared 32 of the more than 300 dispensaries that applied to sell medical pot.

With the state's imprimatur come the state's rules.

Customers can't simply show a medical marijuana card to get in anymore. Now they also have to provide a photo ID before being buzzed through a locked door to an inner sanctum where the marijuana is kept. Security cameras record each transaction. Customer purchases are entered into store computers, accounting for every gram entering and leaving the facility.

One reason for all this is to keep Oregon medical pot from being sold on the black market.

The new law also addresses demands by holders of medical marijuana cards. Until now, they have had to grow the drug themselves, have it grown for them, or take their chances with a shop that might get busted because there was no legal foundation for its existence.

"The business and the market's changing," said Nole Bullock, Cherry City Compassion's executive director. "But it's a great day for Oregon patients to finally have a regulated system in place that guarantees them safe access to safe medicine."

A state license also affords dispensaries some protection by making infractions of state rules a civil matter rather than a crime, Bullock said.

Before now, dispensaries could not charge for medical marijuana, and growers could be reimbursed only for the costs of supplies and utilities, not labor or other expenses.

Some shops charged a membership fee, but provided the pot for free and allowed members to smoke or consume it on site. Others operated like a farmers' market, where growers rented space in the store to dispense their products to users who would reimburse their expenses. Another type dispensed pot in return for reimbursement for the grower and a service fee for the shop.

Allegations arose under the old system that some pot shops were illegally selling marijuana.

The new rules make it legal for dispensaries to pay growers for their product and receive payment from their customers directly. But sales will be scrutinized. The regulations say a shop must document operating costs, to include "costs of transferring, handling, securing, insuring, testing, packaging and processing ... and the cost of supplies, utilities and rent or mortgage."

Clatsop County District Attorney Josh Marquis said this change makes medical pot a commercial, for-profit industry. He said that's not what Oregon residents wanted when they voted to legalize medical marijuana in 1998 and rejected a 2010 ballot measure that would have created a dispensary system.

Dispensaries cannot profit "per se," said Karynn Fish, spokeswoman for the Oregon Health Authority, the state agency that sets the dispensary rules. They can, however, roll the costs of salaries and overhead expenses into what they charge patients, she said.

Bullock, whose dispensary is registered as a nonprofit, said the new program will cut down on black market "street slinging" and unregulated pot businesses.

"Six months from now, we're not going to have the kind of (unregulated) activity we have right now," Bullock said, referring to shops still operating without state licenses.

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